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The US Dollar against the Japanese Yen consolidated below the 110.60 level on Thursday. The currency pair traded between the 55– and 100– hour SMAs during Thursday's trading session.

Technical indicators suggest buying signals on the 4H and daily time-frame charts. Therefore, the exchange rate could edge higher within the following trading session.

However, the 55– and 100– hour simple moving averages near the 110.49 area could provide resistance for the currency exchange rate today.

The US Dollar against the Japanese Yen consolidated below the 110.60 level on Thursday. The currency pair traded between the 55– and 100– hour SMAs during Thursday's trading session.

Technical indicators suggest buying signals on the 4H and daily time-frame charts. Therefore, the exchange rate could edge higher within the following trading session.

However, the 55– and 100– hour simple moving averages near the 110.49 area could provide resistance for the currency exchange rate today.

During the first half of Thursday's trading session, Gold fell by 144 pips or 0.82% against the US Dollar. However, the commodity rebounded from a support level of 1744.8 at the end of the session.

Currently, the yellow metal is trading near the lower boundary of an ascending channel pattern and could be set for a breakout.

If the breakout occurs, a decline towards the 1720.00 area could be expected within this session.

However, if the channel pattern holds, buyers are likely to drive the precious metal's price higher today.

The S&P 500 continues to climb as weekly jobless claims meet estimates.

A series of higher highs suggests that the bullish sentiment is still intact. 4480 would be the next stop as momentum traders jump in. The RSI has broken into the overbought territory, which could temper buyers’ fever to raise their stakes.

The index may look to consolidate its gains after a new all-time high. 4440 is fresh support in case of retracement. 4425 near the upper band of the previous consolidation range would be the second line of defense.

The New Zealand dollar finds support after a rise in RBNZ inflation expectations in Q3.

The kiwi has built several layers of support above the key level of 0.6900 with the latest one at 0.6990. This is an indication that buyers are willing to bid up the price.

After a hiatus at the resistance at 0.7060, the RSI has dropped back to the neutral area to give the bulls a chance to make another push. The narrowing range would culminate in a breakout-raising momentum in the process.

The sterling inched lower after the NIESR GDP estimate for the past three months fell short of expectations.

The rally above the daily resistance at 1.3890 may have saved the pound’s 17-month long rally. Though the combination of overextension and lack of support in the short-term may prolong the retracement.

The RSI’s double-dip into the oversold area may lead to a limited rebound.

The bulls will need to lift 1.3890 in order to reverse gears. Otherwise, a breach below 1.3770 may send the pair to 1.3600.

EUR/USD

Current level - 1.1738

After the bulls managed to limit the sell-off to the support level at 1.1711, we are now witnessing a consolidation just above that level. At the time of writing, the currency pair is trading at 1.1738. The current upward move can be considered as a corrective phase, which could be followed by additional sales targeting another test of the support zone at 1.1711. As of today, there is no planned economic news that would lead to an increase in the volatility of the currency pair.

USD/JPY

Current level - 110.36

The momentum of the bulls was not enough and they failed to keep the trade above the resistance level at 110.56. The subsequent correction currently remains limited to just above the support level at 110.30. The forecast remains positive – for another attack of the mentioned resistance. In the event of a breach, we could observe an attack towards the next significant resistance at 111.00, followed by the area at around 111.70.

GBP/USD

Current level - 1.3811

We saw a second attempt for a breach of the support at 1.3827, but this time, the bears managed to prevail and the attack was successful. At the time of writing, we are witnessing a consolidation phase just below that level, which is already playing the role of a resistance. If the dollar continues to gain positions against the British pound, it is quite possible that we could observe a test of the next support zone at 1.3776. In the event of a breach of this support as well, we may expect a test of the next more significant levels of the higher time frames at 1.3630, followed by the level of 1.3570.

Daily Pivots: (S1) 1.1723; (P) 1.1735; (R1) 1.1747; More..

Outlook in EUR/USD remains unchanged and intraday bias stays neutral first. We'd continue to look for strong support from 1.1602/1703 support zone to bring rebound. On the upside, above 1.1768 minor resistance will turn bias back to the upside for 1.1907 resistance first. However, sustained break of 1.1602 will argue that it's already reversing the trend from 1.1603, and target 61.8% retracement of 1.1603 to 1.2348 at 1.1289.

In the bigger picture, rise from 1.0635 is seen as the third leg of the pattern from 1.0339 (2017 low). Further rally could be seen to cluster resistance at 1.2555 next, (38.2% retracement of 1.6039 to 1.0339 at 1.2516). This will remain the favored case as long as 1.1602 support holds. Reaction from 1.2555 should reveal underlying long term momentum in the pair. However sustained break of 1.1602 will argue that the rise from 1.0635 is over, and turn medium term outlook bearish again.

Daily Pivots: (S1) 1.3774; (P) 1.3826; (R1) 1.3858; More...

Intraday bias in GBP/USD remains neutral as consolidation from 1.3982 is extending. Outlook is unchanged that corrective pattern from 1.4240 could have completed with three waves down to 1.3570. On the upside, break of 1.3982 will resume the rise from 1.3570 to retest 1.4248 high. However, break of 1.3766 support will dampen this bullish view and bring retest of 1.3570.

In the bigger picture, as long as 1.3482 resistance turned support holds, up trend from 1.1409 should still continue. Decisive break of 1.4376 resistance will carry larger bullish implications. However, firm break of 1.3482 support will argue that the rise from 1.1409 has completed. GBP/USD would then be seen in another leg of long term range pattern between 1.1409 and 1.4376. Deeper fall could then be seen to 61.8% retracement of 1.1409 to 1.4248 at 1.2493, and even below.

Markets

Summer trading conditions kicked in after Wednesday's US CPI release. Core bonds and main FX cross rates aren't going anywhere. Higher US PPI and good labor market data (weekly claims) didn't change that. US Treasuries marginally underperformed German Bunds yesterday after the $27bn 30-yr Bond sale stopped above the 1:00 PM bid side. Demand metrics were average. The auction wrapped up the US Treasury's mid-month refinancing operation after solid 3-yr Note and stellar 10-yr Note sales. US yields added up to 1.5 bps in a daily perspective with the belly of the curve outperforming the wings. German yields increased by up to 0.5 bps. 10-yr yield spreads vs Germany narrowed by up to 3 bps with Italy outperforming. EUR/USD stabilized just above the key 1.1704/1.1695 support zone. The pair closed at 1.1730. Sterling lost out against the euro after four days straight failing to take out EUR/GBP 0.8470 support triggered some return action higher. The pair currently changes hands around the 0.85 big figure. The overall low volatility market environment remains fertile ground for stocks. European and US indices added up to 0.5% on a daily basis with a new all-time high for the S&P 500.

Asian stock markets trade mixed this morning with China, Taiwan, and South Korea underperforming. Semiconductor stocks (eg Samsung) lead the way lower as the Delta variant makes way through Asia. China decided to close a part of the world's third-busiest container port (Ningbo-Zhoushan) after an employee tested positive for the coronavirus. Such disruptions will further lengthen supply chains as they did back in May with the temporary closure of the Yantian port. Main FI/FX markets aren't impacted (yet) by this morning's more fragile risk environment. Today's eco calendar is empty apart from August University of Michigan consumer confidence. This implies that more Summer trading scenes could become. Next week's highlights include US retail sales (Tuesday), minutes of the July FOCM meeting (Wednesday), first indications on Chinese growth at the start of Q3 (Monday), and EMU Q2 GDP numbers (Tuesday). The Reserve Bank of New Zealand (Wednesday; see below) and Norges Bank (Thursday; preparing September hike?) hold policy meetings.

News headlines

An official report from the Irish Maritime Development Office shows the impact of the Brexit deal on freight flows between Great Britain and Ireland. The volume of roll-on roll-off cargo fell by 29% compared to the same period in 2019 as Irish exporters want to circumvent possible customs delay's at the UK's border with the EU. Irish shipments to the EU in the first six months of the year nearly doubled.

New Zealand's manufacturing PMI increased from 60.9 to 62.6 in July, the second-best reading on record and the third 60+ outcome in the past five months. While the key sub-index values of production (66.0) and new orders (65.0) both showed further expansion from June, employment (58.3) recorded its highest ever result over the history of the survey. The increasingly tight labor market was mentioned though by many manufacturers who provided negative comments. Supply chain issues and raw material costs were also outlined as problematic. The red-hot PMI comes ahead of next week's central bank meeting where the Reserve Bank of New Zealand is set to become one of the first developed countries to hike policy rates (0.5% from 0.25% expected). NZD/USD didn't react to the PMI, trading stable near 0.70.